Affiliate marketing is often considered the be-all, end-all to online merchants. It’s the New Deal, the best mousetrap ever built, the best thing since sliced bread… well, pick your metaphor. You get the idea.
But here’s the reality, folks: The concept of having tons of partner sites carrying a link to your site, to which you pay a commission only if they sell something from your inventory, sure sounds like the Holy Grail of etailing. But before we all gather round and give thanks, let’s take a look at the dark side.
Like what? Give me a minute. First, let’s talk about how affiliate marketing can work, and work pretty darn well, too.
In a perfect world, a sunny place with plenty of happy people (sort of like southern California), affiliate marketing works like a charm. The concept is this: An online merchant with something to sell – let’s say rubber ducks outfitted with cute accessories representing various professional occupations – launches an affiliate program, or revenue sharing program.
DressedUpDucks.com then partners with various site publishers, all of whom place a cute duck link, or maybe a banner, on their sites. Maybe the banner reads simply, “Buy Ducks Here!” The idea, of course, is to convince visitors to buy ducks. Heck, buy two and pass them out to your friends. (“Do You Give A Duck?”)
So if ClickZ were one of those partner sites, all of you who would click on the duck link would be brought to DressedUpDucks.com, where you’d buy scads of the ducks outfitted with cell phones and Palm VIIs to pass out to all your highly wired marketing friends. What’s in it for partner sites (like ClickZ, in this example) is that we then get a commission on all those ducks you buy.
No heavy lifting on our part: We give up a little bit of remnant space on our site to sport a duck banner. In exchange, we earn some unexpected income.
No heavy lifting on the part of DressedUpDucks.com: The top quacks there have built an extensive ad network with links pointed straight at them across the web, all for no cash outlay. DressedUpDucks.com pays only when visitors actually buy a duck.
But let’s say the world isn’t so sunny, and people aren’t so happy. Let’s say this isn’t southern California, it’s New England. It’s cold, and we are all a little edgy and ticked off because winter looms.
Here’s the dark side of DressedUpDucks.com’s affiliate program: The duck banners aren’t just appearing on remnant inventory on quality sites like ClickZ. They are also floating in tons of places, like the pages built for free by web publishing wanna-bes, who load up their pages with a million other affiliate links. In that kind of company, DressedUpDucks.com – a very classy outfit – starts to look a little… well, cheap.
Worse, the clicks coming in from various sites are tricky to keep track of, the affiliates claim they’ve sent you more duck-buyers than you have record of, and the whole program is a nightmare to administrate. You start to feel nickeled and dimed to death.
Or maybe the program is wildly successful. The ducks are flying off the shelves – literally! You try to automate the whole affiliate piece of the program, but you find that the off-the-shelf solution you chose just doesn’t scale.
See where I’m going here? There’s no guarantee that affiliate marketing is the stuff of a successful long-term online selling strategy.
So how to grow a program successfully? What’s the best way to build a network of sites that are committed to working with you? How do you structure a program to incent your affiliates to stay with you for the long-term? How do you help them promote your products on their sites?
Moving forward, that’s what this column is all about.
Each week in this space, Shawn Collins, who heads up affiliate partnerships at Refer-It, will talk to both the downsides and definite upsides of affiliate marketing. He’ll tell you how to do it right, so you make the most of your program. Refer-It, by the way, is the Alpha Dog of search engines for revenue-sharing programs, and its database includes descriptions and ratings of 1353 affiliate programs.
The sponsor of the column is Commission Junction, a leading provider in the world of web-based affiliate marketing. Since its launch a year ago, Commission Junction manages online advertising relationships between more than 250 retailers and more than 55,000 content sites.
(And by the way, ClickZ does maintain editorial integrity on all our sponsored columns. In this case, Commission Junction owns the real estate around Shawn’s column. But it doesn’t have an influence over what Shawn writes.)
See you next week. In the meantime, feel free to email Shawn with any column ideas.
Affiliate Marketing debuts next Friday, December 3 on ClickZ.